29 July 2011

Recovery Still Not Complete

The U.S. GDP is still not back to pre-recession levels after adjusting for inflation. Per capita GDP is even further behind and will take even longer to return to pre-financial crisis levels.

Arpit Gupta notes that incomes fell significantly below consumption about a year and a half before the financial markets collapsed. Borrowing against inflated housing bubble home values postponed the time of reckoning for this excess consumption for a while, but not indefinitely.